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Posted: February 19, 2014

Where Denver millionaires put their money

Alternative investments appeal to those in the know

Todd Hauer

(Editor's note: This is the last of three parts. Read Part One and Part Two.)

More than half of Denver millionaires say they lack knowledge of alternative investments.

Only 44 percent of Denver millionaires say they are very or somewhat knowledgeable, while 55 percent are not too or not at all knowledgeable.

The findings come from Morgan Stanley's Investor Pulse Poll of 1,004 U.S. high net worth (HNW) investors age 25 to 75 with $100,000 or more in investable household financial assets, including an oversample of 304 Denver investors. About one in three of those interviewed had $1 million or more in household financial assets.

As in the national picture, Denver millionaires who have received advice about alternative investments from a financial advisor or stock broker are reportedly more knowledgeable about these types of investments than those who have not received any professional advice. Additionally, those who have received professional advice report higher ownership of at least one alternative investment and are more likely to plan on investing in at least one type of alternative investment in the next 12 months.

In terms of ownership and plans for investment in the next 12 months, real estate clearly leads the way (67 percent of millionaires currently own it; 39 percent plan on investing in it in the next 12 months).

Major wealth transfers focus on family

Wealth is expected to transfer by 60 percent of Denver HNW investors to others at some point during their lifetimes. Of those, 45 percent plan to transfer at least half of their assets. Children are cited as recipients far and away most often (by 86 percent). On average, investors plan to begin the transfers in 20 years.

About 38 percent expect to be a beneficiary of a transfer of money or other assets in the future. Nearly all say the transfer will come from a family member, especially from a parent or parent-in-law (88 percent). On average, the transfer is expected in 12 years.

People want financial advice:

  • 88 percent want clear communication on how assets can contribute to a retirement income stream
  • 87 percent want analysis of how economy and markets affect portfolio
  • 85 percent want guidance on portfolio’s asset allocation
  • 81 percent want new investment ideas
  • 79 percent want guidance and resources on changes in federal tax policy and exemptions
  • 77 percent want downside protection of portfolio

The poll was conducted October to December 2013, by GfK Public Affairs and Morgan Stanley Corporate Communications.

Todd Hauer is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley Smith Barney in the Denver Tech Center. He can be reached at 720-488-2406 or toll free at 1-800-347-5099, or you can email him at Todd.Hauer@morganstanleysmithbarney.com.

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